Zimpapers Logo

Charity Ruzvidzo  Business Reporter
THE Consumer Council of Zimbabwe (CCZ) has welcomed the slashing of fuel prices saying it is a step in the right direction in revising the country’s high pricing system.Last week, government directed all fuel dealers to slash prices with effect from tomorrow in line with falling global oil prices.

A barrel of oil on the international market has been going down since mid-last year from $118,18 on June 2, to $71,83 on December 19.

Compliance with the directive will see the pump price of petrol dropping from about $1, 54 per litre to a maximum of $1,32 and diesel from an average of $1, 44 to a maximum of $1,20.

Following the expiry of a two-week ultimatum, the government has warned that failure to comply with the directive risks unspecified sanctions.

CCZ regional manager for Matabeleland Comfort Muchekeza said the slashing of fuel prices would make the country more competitive.

“Zimbabwe’s pricing system is not competitive. We’ve a lot of retailers and businesspeople who can’t justify their pricing strategies.
“The directive issued out by the Ministry of Energy and Power Development to reduce fuel prices is critical towards revising our high pricing system,” he said.

Muchekeza said the government should conduct periodical reviews of the prices to ensure they’re in line with international prices.

“The reduction that has been issued so far is good. The prices must be reduced to meet the international prices but we don’t want a situation where we leave businesses unable to support themselves.

“There must be periodical reviews of prices to check if we’re still in line with international pricing,” he said.

He said consumers in Zimbabwe were supposed to derive benefits from blended fuel.

“The government made it mandatory for all petrol sold in the country to be blended.  It’s not logical to have blended fuel at higher prices, consumers should benefit from such developments,” he said.

The slashed fuel prices are based on “a cost — plus model”, which entails the full on board cost plus charges for transportation, levies and taxes, administration and distribution.

The Minister of Energy and Power Development Samuel Undenge said Free On Board (FOB)  prices at Beira were $0,88 per litre for petrol and $0,86 for diesel and have declined to $0,52 and $0,57 respectively.